Millions Wasted: Over £232M in Compensation for Cancelled HS2 Northern Leg, with More Costs on the Horizon

Over £232 million has been disbursed as compensation for an HS2 line that will ultimately not be constructed. According to data gathered by Sky News, more than £500 million has already been allocated to individuals and enterprises along the entire planned path, and additional payments may still be issued.

Political correspondent @NifS

Wednesday, July 3, 2024, 07:

Sky News has disclosed that over £232 million in compensation has been distributed to individuals impacted by the discontinued northern segment of HS2.

Data obtained from Freedom of Information inquiries reveal that nearly £550 million has been allocated to various governmental compensation programs designed to assist residents and businesses affected by the proposed London to Manchester route.

Over 40% of the funds were allocated to land and property owners in the second phase of the initiative, beginning in Birmingham and extending northward. However, this segment was scrapped by the Conservative Party at their 2023 conference, and it will not be constructed.

A total of 2,446 claims have been approved across five different programs, however, 53 claims remain unresolved, a decade after the introduction of the compensation funds.

With each application currently averaging a payout of £242,555, the incoming administration could face additional costs nearing £13 million to fulfill these obligations.

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A representative from HS2 Ltd stated that following the cancellation of the segment, almost all the upcoming deals for phase two are currently suspended. They noted, "We are generally only moving forward with acquisitions that were initiated before October, and only if the property owner decides to go ahead."

"In accordance with governmental directives, we are methodically shutting down the second phase of the program, taking into consideration the requirements of local populations and fiscal responsibilities to taxpayers."

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Sky News has reached out to the Conservative Party to seek their comment.

The initial idea for the HS2 project emerged during the Labour government in 2009 and was subsequently embraced by the Conservative/Liberal Democrat coalition in 2010, carrying an anticipated cost of £37.5 billion.

However, plagued by setbacks and with expenses climbing beyond £100 billion, the initial proposals were gradually reduced. Last year, the Conservative government declared the complete cancellation of the segment from Birmingham to Manchester.

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The verdict was criticized by leaders across the political spectrum, with the mayors of Birmingham and Manchester accusing the decision-makers of treating residents in the North and Midlands as "second class citizens".

However, government officials maintained that the project no longer offered a good return on investment, and that the allocated funds would be more effectively utilized in more localized transportation initiatives.

What are the plans involved, and what is the total amount disbursed?

There have been a total of five reimbursement programs for HS2.

The Express Purchase Scheme is available to individuals who have their entire home or at least 25% of their property located within "safeguarded areas" — zones earmarked or intended for HS2 development. This program enables them to sell their property to the government.

Under this initiative, 144 applications were approved, with most of them, specifically 136, qualifying for the second phase of the project.

However, while the government has allocated slightly more than £900,000 to resolve four of the eight claims along the first phase of the route, it has expended over £34 million on resolving 39 out of 136 claims for the second phase.

HS2 reported that 25 applications were still "active" or awaiting payment.

The Rural Support Zone Scheme allows property owners located beyond the safeguarded area but within 120 meters of the line to choose between a cash offer or a voluntary purchase scheme offered by the government. Applications for this scheme will remain open until one year after the railway section in question begins serving the public.

The state has disbursed nearly £32 million for 116 approved claims in the first phase and approximately £50 million for 589 claims in the second phase, with an additional 15 claims yet to be resolved.

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The Homeowner Payment Scheme was another initiative aimed at assisting individuals who owned properties, or at least 25% of a land parcel, located within 300 meters of the designated line.

The compensation provided varied based on proximity to the designated area, with individuals furthest away receiving £7,000, and those nearest, at the 120-meter mark, getting up to £24,000.

Approximately £11.4 million was distributed among 834 claims during the first phase, and nearly £1.7 million was allocated to 108 claims in the second phase.

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The Need to Sell Scheme was created for individuals who needed to sell their property due to urgent circumstances, like job loss, and had to move because of the railway line, even if they were not living within 300 meters of it.

In the initial phase, 199 applications were approved, followed by 189 in the second phase. Out of these, 332 have been successfully funded, with expenses exceeding £181 million for the first phase and over £85 million for the second. However, 13 applications are still pending completion.

The Exceptional Hardship Scheme, a final compensation plan, was launched during the initial planning stages of the HS2 project under the coalition government.

This enabled property owners and small enterprises that demonstrated an immediate necessity to sell, due to potential impacts on their property value from the proposed primary path of HS2, to file a claim.

Out of the 161 valid claims made in the first phase, 147 have been settled with payments totaling approximately £91.7 million.

All outstanding requests from the terminated second phase have been settled, with 97 claims amounting to a total expenditure exceeding £61.2 million.

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